Markets traded down from the open today; it was almost as though everyone was betting on a negative reaction to the FOMC announcement. SPX traded as low as $1775 within a few minutes of the open this morning; it traded down to $1770 right after the Fed announcement, danced around a bit for the next two hours and closed at $1774, down $19 on the day. RUT followed a similar pattern, losing $16 to close at $1122. One bearish thought: SPX lost 1% on the day, whereas RUT lost 1.4%. RUT normally leads the market higher in bull markets and lower in bearish markets. On the other hand, VIX popped up 1.6 points to 17.4%, well below the high of 18.1% on Friday's strong sell-off. But that could change quickly tomorrow.

Trading volume increased today with 2.9 billion shares of the S&P 500 stocks.  Trading on the NYSE increased 24% and increased 11% on NASDAQ.

The FOMC announced that they intend to continue the reduction of quantitative easing by another ten billion dollars per month in February. I was surprised that the market didn't sell off more than it did on that announcement, but perhaps that is a positive signal. Is the market consensus that it can survive just fine without the Fed's support?

SPX is now down 4.1% from its recent highs. While that is in line with the corrections we saw in 2013, many analysts are predicting a much more severe correction, e.g., down 8% to the 200 dma at $1704. A corresponding drop to the 200 dma on RUT at $1055 would represent an 11% correction.  An 8% correction on RUT leads to $1087.

The RUT Feb 1210/1220 call spreads are all that is left of my Feb iron condor at this point. That position stands at a net gain of $860 on 20 contracts or +6% (on the original capital at risk) with a maximum potential gain of $1,160 or +8%. If I have the opportunity, I will re-establish put spreads to boost the returns.

My own take is that this market is very nervous and therefore dangerous. Be very cautious, especially about any bullish trades. I am tempted to play GOOG's earnings announcement tomorrow, but that will be a very speculative trade. It may be best to sit on the sidelines for a few days.